Netflix's Insulated Stock: A Safe Harbor in Turbulent Markets?
15min read In a market increasingly buffeted by recession fears, trade wars, and interest rate volatility, one money manager is staking his reputation on a seemingly unlikely candidate: Netflix (NFLX). Josh Brown, CEO of Ritholtz Wealth Management, has declared the streaming giant “insulated” from broader economic headwinds, calling it “the best stock in the market for 2025.” Is Brown right? Or is he overlooking the vulnerabilities that have tripped up even the mightiest tech stocks? Let’s dissect the case for Netflix’s resilience—and its risks.
The Case for Insulation: A Subscription Model Built for Recessions
Brown’s argument hinges on Netflix’s subscription-based business model, which he calls a “defensive hedge.” Unlike discretionary spenders—think cruise lines, luxury retailers, or even theme parks—streaming services are a “non-negotiable” for many households, particularly as they get cheaper. With its ad-supported plan now available in 12 countries, Netflix has lowered the barrier to entry, making it harder for subscribers to cancel during lean times.
The data supports this. Despite a 7% price hike in 2023, Netflix added 2.7 million subscribers in Q3—beating its own forecast. Meanwhile, shows it outperforming the broader market by 25% since June 2023, even as tech stocks like Amazon (AMZN) and Alphabet (GOOGL) stumbled.
The Content Advantage: A Moat Against Competition
Netflix’s insulation isn’t just about price. Its deep library of original content—driven by annual content spending of $16 billion—has become a moat against rivals like Disney+ and Amazon Prime Video. Brown points to Netflix’s “crackdown” on password sharing, which cost it 3 million users in 2022 but ultimately strengthened its revenue per user (ARPU). shows advertising revenue surged 45% year-over-year in Q3 2023, even as ARPU rose 5%.
The Weaknesses: Can Netflix Stay Above the Economic Tide?
Yet Brown’s thesis isn’t without holes. For one, Netflix’s pricing strategy relies on a global consumer base that may be more vulnerable to inflation. In emerging markets, where $7.99 is still steep, competitors like Disney+ and HBO Max are gaining traction with cheaper bundles.
Moreover, the streaming wars are intensifying. reveals that while Netflix leads in total subscribers, its growth has slowed to 2% annually—half the pace of 2020. Meanwhile, Disney’s content-driven strategy—leveraging Marvel, Star Wars, and National Geographic—has added 16 million subscribers in the past year alone.
The Bottom Line: Insulated, but Not Immune
Netflix’s insulation thesis holds merit, but it’s far from bulletproof. The stock’s resilience in 2023—up 60% year-to-date—suggests investors are pricing in its defensive attributes. Yet with content costs eating 70% of revenue and competition heating up, Netflix must prove it can sustain growth in a maturing market.
Brown’s call to buy now is bold, but it’s backed by data: Netflix’s subscription base is 240 million strong, and its ad-supported model could add $1 billion in annual revenue by 2025. However, investors would be wise to pair optimism with caution. As history shows, even the most insulated stocks can sink if the economic tide turns—or if the competition builds a better boat.
In the end, Netflix’s insulation may depend less on its business model and more on its ability to keep audiences glued to its screen in an ever-divided attention economy.
